Commission proposes new loans for Ukraine

Jean-Claude Juncker in the European Parliament, 26 Nov. 2014 [EC]

Jean-Claude Juncker in the European Parliament, 26 November. [EC]

The European Commission has proposed new macro-financial assistance for Ukraine of up to €1.8 billion in medium-term loans, the executive said Thursday (8 January).

Due to a deep recession and the conflict with Russia in the east of the country, Ukraine needs further assistance, it said. 

The new programme is intended to assist Ukraine economically and financially with the challenges the country is facing, such as a weak balance of payments. The intention is also to help the new reform-oriented government in dealing with political challenges.

Macro-financial assistance is an exceptional EU crisis-response instrument available to the Union’s partner countries experiencing severe balance of payments problems. It is complementary to assistance provided by the IMF.

“Ukraine is not alone. Europe stands united behind Ukraine and the reform agenda of the new government,” Commission President Jean-Claude Juncker said in a statement

“Our actions speak louder than our words. The European Union has provided unprecedented financial support, and today’s proposal proves that we are ready to continue providing that support. This is European solidarity in action. As always, solidarity goes hand in hand with commitment to reform, which is urgently needed in Ukraine. We want to help the Ukrainian government to put its reform agenda into practice and trigger real change for the country and its people,” he continued.

The policies that the European Commission considers important include further fiscal consolidation, and the continuation of comprehensive reforms in the energy and banking sectors. The Commission also wants to strengthen economic governance, transparency and pursue judicial reforms and the fight against corruption in order to improve conditions for business activity and sustainable growth.

The hope is that the €1.8 billion programme can be implemented in 2015 or in early 2016. It would be the third MFA programme for Ukraine since 2010.

The proposal must be approved by member states and the Parliament.

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